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TOKYO, Dec 26 (Reuters) - Japan's Nikkei share average is
set to edge higher on Wednesday, drawing support from
expectations for an aggressive monetary easing stance by the new
government, which has also helped to weaken the yen and
bolstered exporters' shares.
Shinzo Abe is set to be selected as prime minister by
lawmakers on Wednesday after leading his Liberal Democratic
Party to a landslide victory in a lower house election earlier
this month.
Market players said the Nikkei was likely to trade between
10,000 and 10,200 on Wednesday, but due to the Christmas holiday
doldrums, volume is likely to stay thin.
"The market is overbought, so the Nikkei may not rise
sharply, but 'Abe trades' may invite some buying," said Hiroichi
Nishi, general manager at SMBC Nikko Securities, adding that if
the dollar trades above 85 yen, investors are likely to chase
the Nikkei higher to near 10,200.
On Tuesday, the Nikkei gained 1.4 percent to
10,080.12, nearing a nine-month intraday high of 10,175.16 hit
on Friday.
The dollar last traded at 84.93 yen, having risen as
high as 84.965 yen on Tuesday morning, its highest level since
April 2011. A weak yen boosts exporters' overseas earnings when
repatriated.
After rising 16.4 percent over the last six weeks, the
Nikkei is in "overbought" territory, with its 14-day relative
strength index at 72.66, above 70 which is deemed the overbought
threshold and signalling that a correction may be imminent.
The broader Topix rose 0.6 percent to 838.01 on
Tuesday.
> Yen hits 20-month low over BOJ concerns, fiscal cliff buoys
dollar
> US prices flat, volume plummets before Christmas
STOCKS TO WATCH
--Sumitomo Mitsui Financial Group Inc
Sumitomo Mitsui plans to speed up expansion in Asia via its
non-banking units such as consumer finance and credit, hoping to
lure the region's retail clients, the head of Japan's
third-largest lender by assets said.
--JX Nippon Oil & Energy Corp
Japan's trade ministry on Tuesday imposed administrative
sanctions on refiner JX after it admitted to failing to keep
inspection records properly at its Mizushima-B refinery.
--Hitachi Ltd
Hitachi remains in talks with Lithuania over its plans to
build a nuclear plant after the European country's new
centre-left government said it could shelve nuclear projects,
the company's top executive said on Tuesday.
--Mitsubishi Chemical Holdings Corp
Mitsubishi Chemical said it will acquire drug capsule maker
Qualicaps Co Ltd from U.S.-based Carlyle Group LP for
55.8 billion yen ($660 million) to beef up its pharmaceutical
operations.